Three's Company: Personal Privacy

Privacy in the USA
In the Senate, former presidential candidate and current Commerce Committee Chairman Sen. John McCain (R-AZ) Wednesday introduced yet another Internet Privacy Bill.

In an attempt to build consumer rights into Web content, McCain's bill would require Web sites to disclose what they do with personal data collected from visitors. McCain said the legislation would not prohibit dot.com companies from using visitors' personal data for marketing purposes, but it would require them to tell Web surfers what steps they may take to limit that use.

"Clearly, business should inform consumers in a forthcoming manner how they treat personal information and give consumers meaningful choices as to how that information is used,'' McCain said.

Joining McCain in sponsoring the bill were Senators Spencer Abraham (R-MI), John Kerry (D-MA), and Barbara Boxer (D-CA).

The Federal Trade Commission issued a report in May concluding legislation was needed to bolster privacy protections although Congress and the White House at the time said they preferred to give voluntary industry efforts more time.

In the absence of an enforceable industry standard, the FTC stepped in to oversee bankrupt retailer Toysmart.com Inc.'s attempts to sell its consumer database as an asset.

Lawmakers in both chambers of Congress have introduced legislation to prevent other companies from emulating Toysmart.

Kerry said industry attempts at self-regulation have not proven sufficient, and government legislation is necessary to ensure continued growth of the Internet.

"Self-regulation will have a continued role to play, but it has not been enough,'' Kerry said.

The bill would enable consumers to sue Web companies that violate the bill's privacy parameters to sue for up to $22,000 in personal penalties. It also would call on the National Academy of Sciences to conduct an 18-month study to determine if similar protections are needed for offline customer's personal data.

McCain said that the Commerce Committee would hold hearings on the issue and pass the bill on to the Senate for a full vote in September.

The Permission-based Customer Information Exchange supports the McCain bill because it would expand opt-in Web enterprise's ability to purchase consumer profiling data.

PCIX
PCIX.org contends that opt-in standards would not slow down the Web or stall e-commerce. It would put consumers in control of how their personal information is used and give companies a more efficient means of communicating only with those consumers that permit them to do so.

A group of Internet advertisers also said they approve of the McCain bill because it bars Internet firms from using visitors' medical or financial data, Social Security numbers, and online sexual behavior they may collect.

The Network Advertising Initiative, an industry association that represents about 90 percent of the Web ad firms, said its discussions with the FTC over the past year produced standards that are entrenched in the legislation.

While the FTC issued a report that praised NAI privacy standards, it also called on Congress to pass a consumer-privacy law to cover non-advertising companies. The McCain bill is designed to address privacy concerns on the Web, once and for all.

Floods in China
Of course, any problems in the US and the UK pale in comparison to the issues raised in China. Perhaps citizens of the free world will follow the China Principle of apathy: "well, it may not be good here, but it's worse in China. . ."

Just when the wave of cooperation between the U.S. and Europe crested, Chinese officials sent a torrent of water crashing down on e-commerce in Beijing.

Chinese ministries this week said they would more to establish rules what would slap sales taxes on online transactions, establish a regime for Web site registration, and regulate online ad technology.

U.S. and Chinese technology firms quickly formed a 36-member lobbying group in an attempt to soften potential Chinese Internet rules that could crush e-commerce in the region.

Among the tasks of the forum is a plan to advise Beijing as it creates a system for taxing e-commerce sales. The group is also concerned about Beijing's apparent distrust of online advertising technology, which allows Web firms to track the behavior of users.

At the same time, China announced plans to launch a new second-tier stock market by early next year to help high-tech startups and private firms raise money for operations in the area.

The mixed signal sent by Chinese officials to embrace dot.com companies Monday, while potentially stifling the same companies' e-commerce initiatives Wednesday is characteristic of many regional governments as they grope for a handle of the Internet.

Which hand will win the vast opportunity to tap into the Chinese online market represents remains to be seen.

Police Power

Broadband Access

Personal Privacy